Hard Red Winter Wheat
National average HRW basis was 29 cents under May futures for the past week, which is still above the 5-year average of the strongest basis at this time and is unchanged from last week. Basis remains firm on strong mill demand as competition for supplies continues from feed and export markets. Spot cash sales picked up last week, but then slowed on uncertainty about the condition of the new crop. Crop conditions declined in Kansas with 31% of the crop in poor to very poor condition, 71% poor to very poor in South Dakota and 47% poor to very poor condition in Texas. Cold weather that hit parts of the southern winter wheat states early this week may have caused freeze damage in areas where the crop has entered its fragile growing stages. Tillering wheat is not as susceptible as jointing wheat to severe damage. Wheat that is tillering can withstand temperatures as low as 12 degrees; wheat that is jointing can sustain severe damage at 24 degrees. DTN Ag Weather reported lows in the middle to low 20s for Tuesday morning as far south as northern Texas and southwest Oklahoma, where jointing had been noted in recent USDA crop condition reports.
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National average corn basis was 7 cents over the May futures during the past week, 2 cents lower than the previous week, but continues to move higher than the 5-year average strongest basis level at this time. Corn basis was weaker as cash prices rose on strength in futures tied to tight U.S. supplies. Midwest ethanol plants posted lower basis levels as ethanol futures continue to ignore corn. As corn prices continue to rise, margins become tighter for plants and they have to adjust their basis. Corn basis has also been weaker in the Texas feed markets as the cash price of SRW wheat continues to be cheaper than corn and more readily available for use in feed rations.
National average soybean basis of 8 cents under the May futures is 1 cent higher than last week, and continues to move well above the 5-year average of the strongest basis at this time. Soybean basis along the river was steady and barge freight ended the week slightly lower as demand for empty barges continues to be slow. The opening of the shipping season in the extreme upper Mississippi is still in limbo as the ice in Lake Pepin is still too thick for ice breaking to ready the lake for barge traffic. End-user demand remains firm as farmer selling has slowed on recent cash price weakness and many farmers are becoming distracted with spring field chores ahead of planting season.
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